Ryan Davis • Herald Net • February 3, 2014
Could the legalization of marijuana in Washington create opportunities for small businesses to access a new source of capital investment?
Maybe something like this: Proposed legislation to create a Washington state-run public bank would provide a legal banking alternative for marijuana-related businesses and potentially a new source of credit for small businesses.
While our state voted to legalize marijuana in the past election, possession and distribution remains a federal offense. As a result, many banks will not accept cash deposits from dispensaries or other related businesses for fear of public seizure.
Recently the U.S. Department of Justice announced it was preparing new guidance that would allow state-legalized cannabis businesses to use federal banks. However, without a defined safe harbor or action from Congress, many may feel the risk outweighs the benefit.
A solution may be to create a public bank in the state to handle these deposits and provide banking services.
A public bank is a financial institution in which the state or public actors are owners. Advocates for public banking point to North Dakota as a policy model. As the state receives revenues from taxes and fees, rather than depositing those funds into a commercial bank, they are deposited at the Bank of North Dakota.
Read the entire article here.
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